ALJDEC decisions subject to certification as final

2014A-2192-ROC-RF · Registrar of Contractors · 2016-02-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 14, 2016 APPEARANCES: Complainant Antoine Georges Jamouss appeared and represented himself. Sid A. Horwitz, Esq. represented Respondent One Stop Tile Works, Inc. The Arizona Registrar of Contractors was represented by Assistant Attorney General Thomas Raine. ADMINISTRATIVE LAW JUDGE: Suzanne Marwil _____________________________________________________________________ FINDINGS OF FACT Background and Procedure 1. The Arizona Registrar of Contractors (“the Registrar”) issued License No. 133152-D to Respondent. 2. On July 2, 2014, the Registrar received a Complaint against Respondent regarding improper tile installation throughout Complainants’ home (“the workmanship complaint”). See Exhibit 1. 3. On September 23, 2014, after an inspection, Timothy Pennington, an investigator with the Registrar, issued a Directive finding poor workmanship due to excessive lippage of the tile. See Exhibit 2. 4. As a result of the Complaint, on April 21, 2015, the Registrar issued a Citation against Respondent charging a possible violations of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108,[1] and A.R.S. § 32- 1154(A)(22).[2] See Exhibit 3. 5. Respondent filed a timely answer to the Citation and a hearing was held at the Office of Administrative Hearings (“OAH”) before Administrative Law (“ALJ”) Judge Diane Mihalsky. At the hearing, Pennington testified that sixty to seventy percent of the floor tile installed by Respondent suffered from excessive lippage. On August 24, 2015, Judge Mihalsky issued a decision recommending that the charges in the Citation be sustained, that Respondent’s license be suspended for a period of one day, and that Respondent pay a $500.00 civil penalty. See Exhibit 4. On September 9, 2015, the Registrar accepted the ALJ decision. See Exhibit 5. 6. On September 14, 2015, Complainants filed a claim with the Residential Contractors’ Recovery Fund (“the Fund”) to recover the cost of fixing the issues with the tile in their home. The claim form indicated that the lowest bid that Complainants had received to correct the tile was $19,273.68. See Exhibit 6. 7. The Registrar issued a Notice of Claim for Administrative Payout, finding that Complainants’ actual damages were $19,273.68. See Exhibit 7. Respondent requested a hearing, believing the payout was too high. The Registrar referred the matter to the OAH for an evidentiary hearing. 8. Hearing was held on January 14, 2016, at 1:00 pm. Hearing Evidence 9. The Directive specified that: After investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4- 9-108). You are hereby directed to remedy the following violations by the appropriate means:

1. Tile flooring in living room, kitchen, hallways, two bathrooms, and three bedrooms Flooring does not meet the minimum standards of 1/32 Uneven tile. (Lippage)

Correct by the appropriate means.

10. James Barbour, claims adjuster for the Fund., testified that he reviewed the Directive that had been issued regarding the tile in Complainants’ house, the ALJ decision, the Registrar’s Order accepting that decision, and bids submitted by Complainant in calculating Complainants’ actual damages. 11. Of the three bids provided, Barbour indicated that he utilized the lowest bid of $19,273.68 from Republic West Remodeling. He acknowledged that the bid was in the form of a lump sum for replacement of the entire floor. Barbour then clarified that the bid referred to replacing 1500 square feet of tile and then repainting the baseboards. He deemed this lowest bid reasonable after comparing it to the two other bids for the same work, which amounted to $23,283.00 and $28,015.90. See Exhibit 7. Barbour was aware that the original amounted contracted for between the parties’ was $11,023.58 and that Complainant had paid Respondent that full amount. Barbour understood the amount agreed upon by the parties was rather discounted due to their ongoing relationship. He testified that his calculations were done on a spreadsheet after which the amount of Complainants’ actual damages was sent out via the Notice of Administrative Payout. See Exhibits 8 and 9. 12. Abraham Sarkisian, qualifying party of Respondent, testified that he believed the bids submitted by Complainants were grossly excessive. He indicated that he had prepared his own estimate of what it would cost to prep the floor and install 1700 square feet of tile. See Exhibit A. His estimate specified that the tile would cost $5,100.00, the labor $4,250.00, thin set and grout $850.00, and taking out the tile and prepping the floor $1,700.00, for a total of $11,900.00. He agreed that his estimate for labor was on the low side for the market and could run an addition $0.50 per square foot or $850.00. He also acknowledged that baseboard work could cost an additional $0.25 per square foot or $425.00, raising his estimate somewhat. He noted that Complainants were initially very satisfied with his work and then became upset with him for unrelated reasons and threatened to “get” Respondent’s license. He said that he could not afford to pay the Fund $19,273.68 to prevent suspension of his license. Sarkisian asked that his estimate be used to prevent an even greater miscarriage of justice than what had already taken place as a result of the workmanship complaint. 13. Complainant Antoine Jamouss denied having any connection to the companies that provided the bids that he attached to his recovery fund claim form. He also disputed that the $19,273.68 bid on which the Notice of Administrative Payout was based was excessive. He understood that this bid did not include the price of the tile. Nonetheless, Jamouss was willing to accept the $19,273.68 in order to resolve the matter

CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction. A.R.S. § 32-1132(A) provides that “[a]n award from the fund is limited to the actual damages suffered by the claimant as a direct result of the contractor's violation but shall not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines. . . .” Respondent bears the burden of proof to establish that the proposed payout from the Fund is incorrect by a preponderance of the evidence.[3] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[4] A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[5] After review of all the evidence, the Tribunal concludes that the award provided by the Fund is an accurate reflection of Complainants’ actual damages. The award appears to properly remedy the workmanship violations for which Respondent was responsible. Respondent’s proffered estimate does not convince the Tribunal that the bid utilized by the Recovery Fund was excessive given that it admittedly failed to include all work to be done and was on the low side for labor. In any event, Complainants are not required to rehire Respondent to do their tile work, but were entitled to rely on the market in the form of three bids from licensed contractors to ascertain the cost of redoing their floor. To suggest that the Fund should be obligated to obtain independent bids would place and undue burden on the Fund. The requirement that at least three bids to accompany a Recovery Fund claim amply serves the needs of all parties impacted by an administrative payout. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order, Complainants receive a payout from the Residential Contractors’ Recovery Fund in the amount of $19,273.68. In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be 40 days from the date of that certification. Done this day, February 2, 2016.

/s/ Suzanne Marwil Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] A.R.S. § 32-1154(A) (3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[v]iolation of any rule adopted by the registrar.” A.A.C. R4-9-108 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.” [2] A.R.S. § 32-1154(A)(22) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar.” Emphasis added. [3] See A.A.C. R2-19-119(A) and A.A.C. R2-19-119(B) (1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [4] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [5] Black’s Law Dictionary 1220 (8th ed. 1999).

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